Saturday, January 8, 2011

Stern Makes "Dirty Dozen" List Of South Florida Despicables For 2010; Scores Perfect 10 On New Times' "Dirt Meter"

In South Florida, Broward-Palm Beach New Times reports that foreclosure mill king David J. Stern has made its "Dirty Dozen" list of most despicable South Florida people for the year 2010.

In rating the bad guys from one to ten (with ten being the worst) on its special Dirt Meter (distinguishing mere scamp from pure unadulterated scoundrel), Stern scored a perfect ten. He is said to potentially be the poster boy for the entire foreclosure quagmire in this country, and the story ends its description of Stern by saying that "If Americans ever do take to the streets in violent revolt, it's people like Stern who will be hunted."

For the story, see The Dirty Dozen: 2010's Most Despicable People.

Lawsuit: Insurer Stiffed Homeowner On Claim After Hard Freeze Allegedly Led To Ruptured Water Pipe, Causing Shift In Foundation, Damage To Structure

In Galveston, Texas, The Southeast Texas Record reports:

  • A Santa Fe couple alleges that American Security Insurance Co., Assurant Inc., Claim Adjustment Specialists and adjuster Michael Bower have failed and refused to fully honor their claim over a water line rupture at their residence, recent court documents say.

  • In a lawsuit filed Dec. 16 in Galveston County District Court, complainants James and Karen Wingate accuse the defendants of wrongfully denying the claim for property repairs as well as withholding timely payment of the disputed damages.

  • A hard freeze on Jan. 6 earlier this year caused the water line running from the pump well into the rear of the house under the slab of the patio enclosure and into the house to burst. "As a result, the Wingates' foundation was pushed up and the Wingates' home was substantially damaged," the original petition says. "As a result, the interior, exterior, roof and other structures of the home were damaged."

  • The plaintiffs subsequently filed a claim with American, asking the carrier to handle the repair costs. American handed the claim to Assurant, which turned it over to CAS and Bower for further investigation. According to the suit, the defendants underestimated the damages thus turned down the claim. Repairs were not able to be conducted to the home since the damage, the Wingates say.

  • They insist the continuous delays of payment have inflicted significant economic impact, worry, distress and continuing economic and physical damage.

Source: Couple sues insurer, adjuster over water line rupture at home.

Lawsuit: Landlord's Failure To Fix Water Leak Forces Tenant To Flee Apartment, Citing Mold Damage That Caused Health Concerns, Damage To Possessions

In Jefferson County, Texas, The Southeast Texas Record reports:

  • A Jefferson County man wants to be reimbursed for items he says he lost when mold infested them following a recurring water leak at his apartment. Leonard Lewis filed a lawsuit Dec. 13 in Jefferson County District Court against Kiran Housing Group, doing business as Alabama Garden Apartments.

  • Lewis claims he lived at Alabama Garden Apartments, an apartment complex at 4905 Wyatt in Beaumont owned by Kiran, when the incident occurred. While under lease at the apartments, Lewis discovered a water leak coming from one of his neighboring apartments and repeatedly informed the defendants of the problem, according to the complaint.

  • However, Kiran failed to remedy the problem, the suit states. "It was then discovered that the water leakage caused mold to accumulate on Plaintiff's possessions, requiring them to be destroyed," the complaint says. "Further, due to the unsafe condition of the apartment, and danger to his health and safety, the Plaintiff was forced to move out of his residence and seek alternative shelter."

  • Because of the water leak, Lewis claims he sustained personal property damages and inconvenience. Lewis blames Kiran for causing his damages, saying it negligently violated the Texas Deceptive Trade Practices Act, breached express or implied warranties and engaged in an unconscionable action.

Source: Beaumont man sues apartment owners over mold damage.

Friday, January 7, 2011

Massachusetts High Court Ready To Rule On 'Ibanez/LaRace' Case; Validity Of Thousands Of Bay State Foreclosures Hang In Balance

In Boston, Massachusetts, Bloomberg reports:

  • Massachusetts’s highest court is poised to rule on whether foreclosures in the state should be undone because securitization-industry practices violate real estate law governing how mortgages may be transferred.

  • The fight between homeowners and banks before the Supreme Judicial Court in Boston turns on whether a mortgage can be transferred without naming the recipient, a common securitization practice. Also at issue is whether the right to a mortgage follows the promissory note it secures when the note is sold, as the industry argues.

  • A victory for the homeowners may invalidate some foreclosures and force loan originators to buy back mortgages wrongly transferred into loan pools.(1) Such a ruling may also be cited in other state courts handling litigation related to the foreclosure crisis.


  • The case is U.S. Bank v. Ibanez, 10694, Supreme Judicial Court of Massachusetts (Boston). The lower-court cases are U.S. Bank National Association v. Ibanez, 08-Misc-384283, and Wells Fargo Bank NA v. LaRace, 08-Misc-386755, Commonwealth of Massachusetts, Trial Court, Land Court Department (Boston).(2)

For the story, see Foreclosures May Be Undone by Massachusetts Ruling on Mortgage Transfers.

For a related post, with links to relevant court documents, see Massachusetts High Court Hears Arguments In 'Ibanez' Case That Threatens To Open The Door To Voiding Thousands Of State Foreclosures.

(1) A homeowner victory could also trigger an additional slew of lawsuits (ie. alleging violations of the Federal Fair Debt Collection Practices Act, state law prohibiting unfair and deceptive acts or practices in violation of G.L. c. 93A, § 2, etc.) against the foreclosure mill law firms who have brought foreclosure actions tainted with flaws similar to those at the center of this case.

(2) For Massachusetts Land Court Judge Keith C. Long's two rulings in this matter, see:

For related earlier posts on this story, see:

"Granny Snatching" Expected To Soar As A Prime Form Of Elder Abuse, Allowing Perpetrators To Hijack Control Over Aged Relatives' Assets

The Connecticut Watchdog reports:

  • Granny Snatching. What is it? It’s an ugly phrase and an uglier practice and it is increasingly affecting more and more American families. Granny Snatching occurs when younger family members take custody of an elder relative under false pretenses, convince a judge to declare the elder person incompetent, allowing them to then force their aged relative into a nursing home or similar institution, and strip them of their assets. In the coming decades trillions of dollars will be at stake as America’s population ages, and we must prepare now to defend ourselves and our finances in the future.

  • We hear about these incidents when they involve rich or famous people with lots of money at stake, but not the day-to-day incidents involving regular folks with modest incomes or nest eggs. Yet according to advocates for the elderly, incidents of Granny Snatching are growing exponentially across the US and in Canada. With the first Baby Boomers turning 65 in March 2011, Granny Snatching is expected to quickly become one of the prime forms of elder abuse.(1)

For more, including an account of the author's experience with his own siblings' attempt to "snatch" their own mother by attempting to commit her to a nursing home and hijack control over her assets, see GRANNY SNATCHING: Ron Winter’s New Weekly Blog.

(1) For other resources on "granny snatching," see:

Attorneys Face Elder Abuse, Negligence Suit For Alleged 'Involvement' In POA Abuse Leading To Fleecing Of Cancer Victim's Home, Estate

In Multnomah County, Oregon, Willamette Week reports:

  • Two Portland lawyers are being sued for elder abuse and negligence after allegedly helping two women steal from an ailing relative in her 80s. According to the suit filed Dec. 17 in Multnomah County Circuit Court, lawyers Stacy Fletcher and James Dodge were hired in 2008 to prepare a power of attorney for Evelyn Roth, who was 81 at the time and had recently been diagnosed with esophageal cancer.

  • According to the lawsuit filed on behalf of Roth, the people who hired the lawyers were Kathleen Jingling and Virginia Kuehn, Roth’s niece and cousin respectively. Roth believed they needed power of attorney simply to pay routine bills while Roth underwent medical treatment, the suit says.

  • Jingling and Kuehn were later each sentenced to one year in jail for placing Roth’s house up for sale, selling off her belongings and stealing from her estate.(1)

  • The lawsuit claims Fletcher and Dodge should have known elder abuse was taking place. The suit, filed by Portland lawyer Sibylle Baer, seeks three times the amount of the money stolen—$682,974 total. Dodge says Fletcher was involved in the Roth case and that he himself was not. Fletcher has not yet responded to a request for comment.

Source: Going After the Lawyers for Allegedly Aiding Elder Abuse.

See Cousin, Niece Get Year & A Day After Copping Pleas To Abusing POA To Loot Accounts, Sell Home Out From Under Senior Thought To Be On Deathbed.

Duo Face Felony Charges In Theft From Now-Deceased, Dementia-Stricken Man; One Suspect Scored POA & Had Herself Inheriting Victim's House, Assets: DA

In Lake County, California, Lake County News reports:

  • Two local women have been charged with grand theft and theft from an elder. Karen Lee Allen, 51, and Wendie Christine McRae, 46, both of Lower Lake, were arrested by a District Attorney's Office investigator on Dec. 15. Both women are charged with felony theft from an elder and grand theft exceeding $400 for activities alleged to have taken place in November 2008, according to court records.


  • Senior Deputy District Attorney Rachel Abelson said the two women are alleged to have been involved with accessing the estate of an elderly man with dementia. McRae was a certified nursing assistant at the hospital where the man was receiving care. Abelson alleged that McRae was getting money from the man while he was still alive.

  • Within a month of meeting him, McRae is alleged to have gotten power of attorney and within two months was inheriting from his estate, Abelson said. Abelson said McRae was set to get stocks and a house as part of the inheritance, and between $10,000 and $35,000 in cash.

For more, see Women face charges in case alleging theft from elder.

Thursday, January 6, 2011

Boston Feds: Attorney/Title Agent Pocketed Closing Cash Meant For Mortgage Payoffs, Seller On Three Deals, Then Issued Title Insurance To Victims

From the Office of the U.S. Attorney (Boston, Massachusetts):

  • A Boston attorney was arraigned [] on wire fraud and money laundering charges arising out of a mortgage fraud scheme involving properties in Braintree and Malden. STUART H. SOJCHER, 57, of Leominster, was indicted by a federal grand jury on four counts of wire fraud and six counts of money laundering.

  • According to the indictment, Sojcher submitted fraudulent loan documents to two mortgage lenders and then misappropriated most of the $1.3 million in proceeds rather than paying off the prior mortgages as directed by the lenders.

  • The indictment alleges that Sojcher also agreed to perform a closing in connection with a legitimate property purchase, but pocketed the proceeds of that loan, along with the down payment made by the buyers, rather than paying the proceeds to the seller.

  • To conceal his fraud, Sojcher issued title insurance on all three of the properties, thereby pocketing the commissions from his sale of the policies and lulling the new lenders, and the innocent homeowners, into believing that the previous mortgages had been paid off.(1)

For the U.S. Attorney press release, see Attorney Charged With Mortgage Fraud.

(1) If the allegations in this matter turn out to be true, the victims will be able to turn to the Massachusetts Clients' Security Board of the Supreme Judicial Court, which manages and distribute money collected from annual dues paid by members of the bar to members of the public who have sustained a financial loss caused by the dishonest conduct of a member of the bar acting as an attorney or a fiduciary.

For similar "attorney ripoff reimbursement funds" that cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:

Maps available courtesy of The National Client Protection Organization, Inc.

Jailed Son Scores $1.1M Inheritance From Deceased Mom, Despite Getting Ten Years For Neglect, Abuse, $115K Ripoff Before Her Death

In Louisville, Kentucky, The Louisville Courier Journal reports:

  • Filthy, frail and suffering from dementia, 81-year-old Harriet Robbins was removed from her Cherokee Gardens home in late 2006 after police found the retired church bookkeeper alone and in “deplorable condition,” with no heat or power, according to court records.

  • Her son and caregiver, John Jackson Robbins Jr., later pleaded guilty to charges of neglect, abuse and stealing $115,000 from her. Robbins, 53, was sentenced to 10 years in prison in 2008 and is incarcerated at the Kentucky State Reformatory.

  • But he's now a wealthy man — having inherited his mother's $1.1 million estate after she died in 2008. Advocates say it's a prime example of why Kentucky needs a law that prevents people who exploit or abuse elderly or vulnerable adults from inheriting their estates when they die — similar to the state'sslayer statute,” which bars killers from financial gain as a result of their crimes.

For more, see Preying on Seniors Relatives abuse, but still inherit.

Go her for more on Preying on Seniors.

Media Probe Reveals Illegal Evictions At Indiana Nursing Homes; Weak Rules Enforcement Leads To Booting As Cheap, Easy Way To Unload Unwanted Patients

In Indianapolis, Indiana, The Indianapolis Star reports:

  • Nursing homes are allowed to evict residents, but only for certain reasons. And only after telling the residents they have a right to appeal. And only if the nursing home has found another suitable home for the residents. That's the law. But the law isn't always reality.

  • An investigation by The Indianapolis Star found numerous examples of what the state's ombudsman for long-term care calls "a major problem": nursing homes evicting patients without regard for their rights.

  • In one case, an Auburn facility dumped a resident at an emergency room and refused to take him back, leaving him stranded at the hospital for three weeks until he could find another home. In another case, a Bedford home tried to evict a brain-damaged teenager who had no safe place to go.(1)

  • The Star also found that the state almost never punishes nursing homes, even after it has been made aware that a facility is violating state and federal laws. "I think if we had a better enforcement system or a more punitive enforcement system, people would quit" wrongly evicting residents, said long-term care ombudsman Arlene Franklin of the state's Family and Social Services Administration. "If there were a harsher penalty for that, they wouldn't do so many inappropriate discharges."

  • The eviction rules, based on two-decade-old federal legislation, aim to protect residents from being capriciously tossed out or threatened with eviction. Instead, said Franklin -- the top state official charged with representing the interests of nursing home residents -- a lack of state enforcement has made eviction a cheap and easy way for understaffed Indiana nursing homes to get rid of patients who are too expensive, too troublesome or too likely to report problems to health inspectors.(2)

For more, see Nursing homes breaking the law (Residents' rights ignored in evictions; penalties are rare).

(1) Reportedly, a nursing home attempted to evict Jacob Householder, a brain-damaged teenager who needed round-the-clock care -- without ever finding a place to put him. The home did list another facility on Jacob's discharge notice, but it was a nursing home that already had said it would not take the teen. When the Householder family appealed to the state, Garden Villa denied that it had a duty to make sure Jacob had a place to go where he would be cared for, the story states. The state eventually ruled that the discharge was unsound, but only after the teen's mother, Angela Householder, fought through nearly a year of appeals hearings, during which she -- unable to afford a lawyer -- devoted several hours a day to learning the law. The issue was finally resolved when the home changed administrators, and Jacob was allowed to stay. The home was never cited, according to the story.

(2) According to the story, some states already provide greater protections for residents, but advocates say Indiana homes can easily circumvent their legal obligation to receive approval from a resident's doctor when a home says it can't meet the resident's needs. Florida, however, requires the doctor to actually sign the discharge notice, and Michigan requires nursing homes to give residents counseling before an eviction and provides for the state to offer counseling afterward, the story states.

Wednesday, January 5, 2011

Thousands Of Affidavits 'Robosigned' By Dead Woman Used By Zombie Debt Buyers To Collect Debts In Credit Card Account Lawsuits

The Wall Street Journal reports:

  • Martha Kunkle has come back to life. She died in 1995. Yet her signature later appeared on thousands of affidavits submitted by one of the nation's largest debt collectors, Portfolio Recovery Associates Inc., in lawsuits filed against borrowers.

  • Some regulators complain that the use of Ms. Kunkle's name reflects an epidemic of mass-produced, sloppy and inaccurate documentation in the debt-collection industry.


  • Large debt collectors such as Portfolio Recovery Associates and publicly traded rivals Encore Capital Group Inc. and Asset Acceptance Capital Corp. frequently buy delinquent accounts in bulk. Information about each debt sometimes is little more than a line in a spreadsheet with the borrower's name and amount owed, according to lawyers who represent borrowers. As of Sept. 30, Portfolio Recovery Associates had $91.5 million in revenue from lawsuits it won, or 34% of its overall revenue.


  • Questions about Martha Kunkle first popped up in 2008 after her name appeared in thousands of affidavits generated by a unit of Providian National Corp. The credit-card issuer sold an undisclosed number of delinquent account balances to Portfolio Recovery Associates and other debt collectors, which then sued the borrowers to collect the debt.

For more, see Dead Soul Is a Debt Collector (Deceased Woman's Name Was Robo-Signed on Thousands of Affidavits).

MERS: A Primer

The Washington Post recently ran a story on Virginia-based Mortgage Electronic Registrations Systems ("MERS"), the electronic clearinghouse serving as a registry with a reported 67 million mortgages on file, that is said to be at the center of the foreclosure mess by its critics.

For those who don't know much about MERS, the story may be worth a read.(1)

For the story, see How a mortgage clearinghouse became a villain in the foreclosure mess.

In a related commentary, see Rolling Stone: An Extremely Long Metaphor to Explain Mortgage Chaos (describing MERS as "essentially an effort at systematically evading taxes and hiding information from homeowners in ways that enabled the Countrywides of the world to defraud investors and avoid legal consequences for same").

(1) For some additional insight on MERS, see:

Ohio AG Urges Continued Vigilance By The Courts In Foreclosure Robosigner Cases

From the Office of the Ohio Attorney General:

  • In a letter sent [] to Ohio judges, Attorney General Richard Cordray has requested that the state courts continue to pay close attention to foreclosure cases that may have affidavits signed by robo-signers. In support of continued vigilance, Cordray highlights several courts that have taken action to address the situation.

  • "In tracking these cases throughout the state, we have found that judges are finding different ways to handle them," said Cordray. "Judges from Cuyahoga to Trumbull to Butler Counties have all found ways to deal with affidavits that may be fraudulent. I strongly urge other courts to consider options that will work best for them as our office decides how to handle the individual cases."

  • In the letter, Cordray highlights the following decisions by Common Pleas Judges:

    In Butler County, Judge Charles Pater issued an order denying GMAC's motion to ratify a judgment because "neither the Ohio Civil Rules nor the local rules of this court provide a procedure for or authorize a court to 'ratify' a final appealable order" and stating that "the proper course of action would be for GMAC to first file a motion to set aside its judgment and then, once the court grants that motion, to refile its motion for summary judgment with a correctly executed affidavit in support."

    In Cuyahoga County, Judge Nancy Russo has scheduled a hearing requiring a foreclosure plaintiff "to provide the court with proof of integrity of all documents submitted."(1)

    In Franklin County, Judge John Bender issued an order in a foreclosure case requiring that foreclosure counsel "personally certify the authenticity and accuracy of all documents submitted in support of judgment."

    In Trumbull County, Judge Andrew Logan sent a letter to foreclosure counsel requiring that affidavits state that the signatory "has personal knowledge of the file and has personally reviewed the documents."

Source: Ohio Courts Take Action in Foreclosure Cases.

Go here to view the Ohio AG's letter to Ohio judges in full.

(1) The Ohio AG's letter notes a recommendation made by the Cuyahoga County Court of Common Pleas for dealing with robosigned affidavits:

  • The Cuyahoga County Court of Common Pleas has issued a policy on foreclosure affidavits, recommending that its judges issue an order requiring a lender who submitted a robo-signed affidavit, pre or post-judgment, to show cause why the case should not be dismissed without prejudice. In the future, counsel for a lender in a foreclosure proceeding must sign an affidavit attesting that counsel has reviewed the file and confirmed with his or her client that the client reviewed the file. The policy, which is currently under review, and template affidavit are available [here].

Real Estate Investor Agrees To Pay $47K+ To Settle Civil Charges Of Foreclosure Auction Bid Rigging Brought By NC AG

From the Office of the North Carolina Attorney General:

  • A Virginia man and his company are barred from rigging bids on public auctions and must pay civil penalties and consumer refunds for trying to fix foreclosure sales of properties in Durham and Mecklenburg counties, Attorney General Roy Cooper announced [].


  • The Attorney General alleges that Bruce Olvin McBarnette of Sterling, Virginia and his company, Summit Connection LLC, entered into agreements to rig bids on four foreclosed properties being auctioned in Durham County in 2009 and 2010:

    McBarnette told a local pastor that he would continue bidding against her for property her church wanted to purchase unless she paid him $1,200.

    A man trying to purchase a home for his mother paid McBarnette $800 after McBarnette told him he would lose the auction unless he paid the money.

    A pastor who wanted to help revitalize his church’s neighborhood paid McBarnette a total of $2,900 so that his company wouldn’t keep bidding on two properties

  • In seven other property auctions, Cooper contends that McBarnette attempted to get competing bidders to pay him not to bid against them but the bidders turned him down. Four of those auctions involved Durham County properties, and three involved Mecklenburg County properties.

  • Wake County Superior Court Judge Donald Stephens [] approved Cooper’s request for a consent judgment against McBarnette and Summit Connection. Under the judgment, McBarnette and Summit Connection must pay $47,400.(1)

For the NC AG press release, see Attorney General stops scheme to rig bids on foreclosure auctions (Company sought to illegally manipulate sales of Durham, Mecklenburg properties).

(1) This guy appears to have gotten off pretty easy. Compare this case with another North Carolina case where the Feds brought criminal charges against a foreclosure auction bid rigging racket, as reported in a recent U.S. Department of Justice press release: North Carolina Real Estate Speculator Pleads Guilty to Bid Rigging in Real Estate Foreclosure Auctions ("Anyone with information concerning bid rigging or fraud related to real estate foreclosure auctions should contact the Antitrust Division’s Atlanta Field Office at 404-331-7100 or visit").

Go here for other posts & links on bid rigging at foreclosure and tax sale auctions.

Tuesday, January 4, 2011

Pennsylvania Notary Unlicensed In New Jersey At Center Of Garden State Robosigner Scandal

The New York Post reports:

  • The face of New Jersey's robo-signing scandal may be a Pennsylvania notary public who signed thousands of foreclosure documents in the Garden State even though he wasn't licensed there.

  • Thomas Strain, who now heads the bankruptcy team at GMAC Mortgage Corp., has emerged as a key player in New Jersey's foreclosure mess through a damning report that swayed the state's top judge to crack down on rogue foreclosure filings by the nation's largest mortgage lenders, including GMAC.


  • In announcing the measures [to halt abusive foreclosure practices in the state, including rubber-stamping documents without verifying their authenticity, known as robo-signing],(1) [New Jersey's chief justice, Stuart] Rabner pointed to a report compiled by Legal Services of New Jersey, a non-profit in Edison, NJ, which mentions Strain in no less than four cases involving instances of robo-signing when Strain worked for Mount Laurel, NJ-based Full Spectrum Services prior to joining GMAC in 2009. The report also repeatedly mentions Strain's former boss, Frank Hallinan, a lawyer with mortgage law firm Phelan, Hallinan and Schmeig.(2)

  • Full Spectrum was a legal support company owned and operated by Phelan, Hallinan. "I was notarizing maybe on an average of 50 a day," Strain said under oath in a 2008 deposition attached to the report.

  • In one foreclosure case, Strain verified that Hallinan, who is Strain's primary notary client, is a vice president and assistant secretary of Mortgage Electronic Registration Systems, the electronic registry that tracks servicing rights and ownership of mortgages. But when questioned as to how he confirmed that Hallinan held this position, Strain said "word of mouth" before admitting, "I do not know."

  • In another instance, Strain said he couldn't explain why he signed off on a document referring to Hallinan as a "she" rather than a "he." Strain also admitted that Hallinan may not have been present when he notarized documents on his behalf because they often worked out of different offices. When asked in the 2008 deposition if he was authorized to work as a notary in NJ, Strain said "no" even though he acknowledged notarizing documents in the state.

  • Strain said under oath he understood the repercussions for false notarizations, but when asked for specifics he stumbled: "I don't know the exact. . .I just know that you have to. . .I don't know what the actual penalties are."

  • As for Hallinan, the report alleges that he testified to preparing his mortgage assignments according to the instructions he received from the foreclosing party "without reviewing and supporting documentation." Neither Strain nor Hallinan responded to requests for comment.

For the story, see Report rips NJ foreclosure robo-signing notary.

See also Legal Services of New Jersey resource material on statewide robosigner scandal.

(1) For the court's 'robosigner' orders, see:

(2) For the report, see Legal Services of New Jersey Report and Recommendations to the New Jersey Supreme Court concerning False Statements and Swearing in Foreclosure Proceedings, November 4th, 2010.

For the Exhibits to the Report:

Lender Processing Services

Deposition Transcripts

Sample Documents

Deutsche Bank Memos

Scholarly Writing

Examples of Robo-Signing in NJ

Court Sanctions and Corrective Actions



Go here for links to robosigner videos.

Foreclosure Law 'Reading List' To Be Given To Central Florida Judges; Circuit Chief Hopes Briefing Will Help Jurists Avoid Getting "A Pie In The Face"

In Central Florida, the Sarasota Herald Tribune reports:

  • Starting Monday, three of the most experienced circuit judges will begin handling civil cases [in the courtrooms of Florida's 12th Judicial Circuit], but first they have a reading list: lengthy analysis of the latest foreclosure law and arguments, and guides written by judges who have been in the foreclosure mess for years.

  • "It's hard to step into that role," said 12th Circuit Chief Judge Lee Haworth, who made the judicial assignments for this year. "I'm hoping we can get them briefed so they don't get a pie in the face."

  • Foreclosures are not even close to the most complex type of litigation to cross a civil judge's desk -- for example, some trials about car crashes involve medical testimony and have seven or eight attorneys. But the more advanced foreclosure defenses now delve into the sometimes labyrinth world of financial markets, trusts and securities. The handbooks discuss the areas of disagreement, or "gray areas" in the law. "There's a larger gray area than we like," Haworth said.

For the story, see Judges studying home suits (FORECLOSURES: Three will have to get up to speed on a fast-moving field).

Fla Appeals Court 'Green Lights' Class Action Against Foreclosure Mill Accused Of Clipping Delinquent Borrowers In Bogus Loan Reinstatement Fee Ripoff

In West Palm Beach, Florida, The Palm Beach Post reports:

  • As many as 2,000 homeowners suing the law firm of self-proclaimed foreclosure king David J. Stern over excessive attorney fees and costs won a major victory [last week] when an appeals court blessed the group's class-action status.

  • "We are very excited," said Louis M. Silber, the West Palm Beach attorney who filed the case in January 2007 — the first class-action lawsuit filed against Stern and his Plantation-based law firm stemming from foreclosure fraud accusations.

  • In a four-page opinion, the 4th District Court of Appeal upheld the findings of Circuit Judge Thomas H. Barkdull,, who decided the complaints and circumstances of the homeowners were so similar that they would best be handled in a class-action lawsuit.

  • Members of the class are homeowners who received letters from Stern's firm between Jan. 18, 2003 and Feb. 19 2009 offering to reinstate their loans with Wells Fargo by paying reinstatement charges.(1)

For more, see Judge OK's class-action status for homeowner lawsuit against Florida law firm.

See also South Florida Sun Sentinel: Court upholds decision on Stern foreclosure class action suit (Homeowners claim they were charged excessive fees for title searches and examinations, being served foreclosure papers, legal work — and in some cases, were billed for expenses and mortgage payments not yet due).

For the ruling, see Law Offices of David J. Stern, P.A. v. Banner, Case No. 4D09-3928 (Fla. App. 4th DCA, December 29, 2010).

(1) The class action lawsuit claims that the foreclosure mill's alleged misbehavior constitutes violations of the Florida Consumer Collection Practices Act and the Florida Deceptive and Unfair Trade Practices Act.

BofA Continues Its Reckless Conduct By Threatening Foreclosure & Ruining Homeowners' Credit Despite Acknowledging That Mortgage Is Not In Default

In West Hartford, Connecticut, Connecticut Watchdog reports:

  • In one of the more bizarre foreclosure cases, Bank of America is threatening to throw a West Hartford family out of their home even though the couple never missed a mortgage payment.

  • The largest bank in the United States earlier this month notified Shock Baitch and his wife Lisa (Friedman) Baitch that foreclosure action will start today – Christmas eve – unless the couple agrees to put their home up for a forced sale.

  • Why? Because another unit of Bank of America erroneously reported to credit agencies that the family was seeking a loan modification, ruining their credit rating and as the result putting their mortgage into default.

  • All this is happening even though the bank – after admitting it erred and sent a letter of apology in September – handed this case to a special unit at Bank of America that is charged with dealing with severe customer issues. It promised to notify the credit reporting agencies that the couple were not deadbeats, but were good credit risks.


  • [The couple's attorney Wendell] Davis, a member of the Ct Bar Association’s foreclosure committee, said he is preparing a lawsuit to protect his clients because it’s the only way to hold Bank Of America accountable for its actions.

For more, see Bank Of America’s Christmas present: Foreclose Even Though Not A Payment Missed.

Indiana Homeowner Caught In Middle Of Tug-Of-War Between Two Banks Both Claiming To Own Same Mortgage

In Bloomington, Indiana, WRTV-TV Channel 6 reports:

  • Bickering between banks over who owns the mortgage to a Bloomington home could force the family living there into foreclosure. Jonathan Partlow said he was trying to modify his family's loan with Washington Mutual when he received a notice from La Salle Bank seeking to foreclose on his property, 6News' Rafael Sanchez reported. “We never received a notice, not even a 'You owe us money. Pay us,'" said Partlow, who claims the family has never done business with La Salle Bank.

  • But both banks maintain they own the home and each claim they're owed more than $1.5 million. JP Morgan Chase also believes it has a stake in the home because it is seeking to buy bankrupt Washington Mutual and its assets, a deal that's at the center of a separate legal battle. The Partlows have filed a lawsuit in Monroe County Circuit Court against the banks seeking to stop the foreclosure.

  • "As a matter of common sense, two banks can't have rights to a single debt,” said the family's attorney, Joe Williams. He said he's upset his family, including their three children, are being dragged into the middle of the banks' dispute. "We wake up every day and we are afraid to leave because people are coming to their homes and the locks are changed,” Partlow said. “I hate to call them banksters, (like gangsters) but that's what they are. Somebody has take a stand and say enough is enough." The Partlows resume their legal fight on Jan. 14.

Source: Mortgage Mix-Up Could Cost Family Their Home (2 Banks Say They Own Same Home).

Monday, January 3, 2011

Florida Appeals Court: Presenting Meritorious Defense In Foreclosure Action Unnecessary Where Notice Of Lawsuit Not Properly Served On Homeowner

A recent ruling by a Florida appeals court hopefully serves as a reminder to the rubber-stamping trial judges intent on pushing as many foreclosure judgments through the rocket dockets as quickly as possible to slow down when defects in the process by which notice of the lawsuit was purportedly served on the homeowner are apparent on the face of the affidavit of service filed in court by the process server. Apparently, trial judge Ronald M. Friedman of the Miami-Dade County Circuit Court believed that it is legally acceptable to rubber-stamp a judgment in a foreclosure action when notice thereof was not properly served on the homeowner if the homeowner has not presented a meritorious defense to the lawsuit.(1)

According to the appeals court:

  • Where no in personam jurisdiction is obtained over a defendant, the defendant is not required to demonstrate a meritorious defense to set aside the default. Ubilla v. L&W Supply, 637 So. 2d 994 (Fla. 3d DCA 1994); Gamboa v. Jones, 455 So. 2d 613 (Fla. 3d DCA 1984). The trial court should not have required Ms. Bennett to demonstrate a meritorious defense to the action once it became clear that the summons and complaint were never properly served.(2)

For the ruling, see Bennett v. Christiana Bank & Trust Co., No. 3D09-2653 (Fla. App. 3d DCA, December 1, 2010).

(1) Judge Friedman entered an order actually finding that the service of process wasquestionable,” but because there was no meritorious defense to the foreclosure, he denied the motion to vacate the foreclosure judgment.

(2) To the uninitiated, this would appear to be a pretty basic and fundamental precept of law. Apparently not, at least not for Judge Friedman. Either that or maybe he wasn't expecting that the financially strapped homeowner would be able to afford the cost (ie. attorney fees) of filing an appeal of his ruling. As trial judges ponder this ruling, they may also want to consider whether presenting a meritorious defense to a foreclosure action by a homeowner is necessary where the party initiating the action has failed to prove that it has standing to bring the lawsuit in the first place.

By the way, where a foreclosure sale has already taken place with the property being purchased by an unwitting third party, the situation illustrated by this case could result in the foreclosure sale being voided and, consequently, the title to the property held by the third party purchaser (and any other property interest holders - ie. downstream buyers, mortgage holders, etc. - claiming under the 3rd party buyer) being voided as well.

Florida Trial Judges Continue Sloppy Work In Foreclosure Actions; Rubber-Stamped Judgments Tainted By Sewer Service Reversed By State Appellate Courts

The Palm Beach Post reports:

  • Improperly served foreclosure notices may be the mortgage industry's next roadblock to repossessing homes. The Florida attorney general's office is investigating two of the state's largest companies that serve court summonses on homeowners, while at the same time [appellate court] judges are throwing out rulings based on faulty deliveries. This month, appeals courts in Miami and Palm Beach County sided with homeowners in foreclosures where judges agreed their summonses were not appropriately served.(1)

  • In the Miami case, the homeowner said she was recovering at her mother's home after surgery when the person serving her the summons swore he personally handed it to her at her residence. But the server's own notes on the file showed he left the documents at the door after seeing curtains move and assuming someone was home. The homeowner later said she had no knowledge of the foreclosure until a final judgment was entered against her.(2)


  • An attorney for one of the firms under investigation [by the state], Miami-based Gissen & Zawyer Process Service Inc., said the company plans to cooperate with the attorney general, which launched its inquiry Dec. 10. He acknowledged that in the tens of thousands of summonses served, there have likely been mistakes.


  • It was Gissen & Zawyer that served the foreclosure summons to a Palm Beach County homeowner who won an argument Dec. 15 in the Fourth District Court of Appeal. The Royal Palm Beach law firm Ice Legal defended the homeowner, showing in its arguments scribbled notes that included one illegible grouping of numbers — either the server's identification number or the time of service. Both are required by state statute.(3)

  • While the omission may seem like a technicality, it's a violation of law, said attorney Tom Ice. "Those rules are designed to stop the 'sewer service' so rampant in foreclosures," said Ice, referring to the slang term given bad process service.(4) "Once we accept the notion that some laws don't need to be enforced, where do we draw the line?"

For more, see Problems with foreclosure notices loom as next flaw in process.

(1) It should be noted that in both of the rulings, Florida appeals courts reversed rulings of lower courts which had earlier OK'd the patently obvious defective work of sloppy process servers. The guilty trial judges whose screw-ups were reversed: Miami-Dade County Circuit Court Judge Ronald M. Friedman, and Palm Beach County Circuit Court Judge Meenu Sasser.

(2) In Bennett v. Christiana Bank & Trust Co., No. 3D09-2653, (Fla. App. 3d DCA, December 1, 2010), Miami-Dade County Circuit Court Judge Friedman entered an order finding that the service was “questionable,” but that there was no meritorious defense to the foreclosure. He then denied the motion to vacate the foreclosure judgment. In reversing Friedman's ruling, the three-judge appeals court panel made the following statements of Florida law (bold text is my emphasis, not in the original text):

  • Strict construction of, and compliance with, statutes governing service of process is required. Shurman v. Atl. Mortgage & Inv. Corp., 795 So. 2d 952, 954 (Fla. 2001). Without proper service, a court may not proceed in the matter. Re-Employment Servs., Ltd. v. Nat’l Loan Acquisitions Co., 969 So. 2d 467, 471 (Fla. 5th DCA 2007) (citing Henry P. Trawick, Jr., Florida Practice and Procedure §8:20 (2007 ed.)). “A summons properly issued and served is the method by which a court acquires jurisdiction over a defendant.” Seymour v. Panchita Inv., Inc., 28 So. 3d 194, 196 (Fla. 3d DCA 2010). In analyzing whether service is proper, the return of service is the point of departure.

    A process server’s return which is regular on its face is presumed valid absent clear and convincing evidence to the contrary. Bank of Am. v. Bornstein, 39 So. 3d 500 (Fla. 4th DCA 2010); TelfCorp. v. Gomez, 671 So. 2d 818, 818 (Fla. 3d DCA 1996). Moreover, a simple denial is insufficient to impeach the validity of service. Telfcorp. However, in this case, Ms. Bennett raised more than her own sworn denial. The process server’s own notes, an admission against the interest of his principal, see § 90.803(18)(d), Fla. Stat. (2009), prove the insufficiency of service. The process server’s last entry reflects that he “Saw Curtains Move, Read Aloud Docs, SVP Docs at Door.”

    Christiana Bank argues that there is no testimony to explain what “SVP” means, but “Docs at Door” is quite self-explanatory. Curtains may move because of the wind or curious cats, and not just because some prospective defendant is attempting to avoid service.


  • Far more troubling is the fact that Christiana Bank and its attorneys ignored this discrepancy in the return of service. In its motion for summary judgment Christiana Bank lleges that the “Defendant(s) were duly and regularly served with process.” The Bank’s proposed Final Judgment of Foreclosure, prepared by its attorneys, stated: “Service of process having been duly and regularly obtained over DEBBIE BENNETT . . . .”

    Once a defect in the return of service is shown, the burden of demonstrating regular service is on the party seeking to invoke the court’s jurisdiction. Bornstein, 39 So. 3d at 503; BoatFloat, LLC v. Cen. Transp. Int’l, Inc., 941 So. 2d 1271 (Fla. 4th DCA 2006). That burden was not met here. Christiana Bank, its trial court attorneys, and Christopher P. Mas of the process serving entity Pro-Vest LLC offered no testimony or other competent evidence to address the deficiency in service identified by Ms. Bennett’s counsel. Nor did Christiana Bank examine the process server’s notes after they were specifically called to its attention by Ms. Bennett’s newly-retained counsel, confess error by stipulating to the vacation of the final judgment, and allow Ms. Bennett to file and serve a responsive pleading.

    Where no in personam jurisdiction is obtained over a defendant, the defendant is not required to demonstrate a meritorious defense to set aside the default. Ubilla v. L&W Supply, 637 So. 2d 994 (Fla. 3d DCA 1994); Gamboa v. Jones, 455 So. 2d 613 (Fla. 3d DCA 1984). The trial court should not have required Ms. Bennett to demonstrate a meritorious defense to the action once it became clear that the summons and complaint were never properly served.


It should be noted that there might have been some evidence of illegal, inflated billings by the foreclosing lender in this case, as highlighted by this excerpt from the appeals court ruling:

  • Finally, an examination of the final judgment and supporting affidavit reveals an array of fees and charges that merit attention on remand. Charges for over $6,400 of force-placed insurance, “forbearance interestof over $11,300 (above and beyond $14,817.73 in accrued interest from alleged default to the date of judgment), and unitemized, conflicting foreclosure expenses” were contained in Christiana Bank’s affidavit and the final judgment without reference to the applicable provisions of the loan documents.

    While we express no opinion regarding the validity or invalidity of these charges, we call them to the parties’ and trial court’s attention so that they can be addressed.

Representing the homeowner in this case was Joseph J. Pappacoda, Fort Lauderdale, FL.

(3) The appeals court in Kwong v. Countrywide Home Loans Servicing, L.P., No. 4D10-1129 (Fla. App. 4th DCA, December 15, 2010), kept its ruling short and sweet, as evidenced by its one-paragraph reversal:

  • James Kwong and Lifen Li Kwong appeal from a non-final order denying their motion to quash service of process. They claim that service was defective because the process servicer failed to note, among other things, the time of service on the copy of the complaint served. Because strict compliance with statutory requirements of service is mandated, we conclude that failure to make the obligatory notations renders the service defective. We therefore reverse and remand for further proceedings. See Vidal v. Suntrust Bank, 41 So. 3d 401 (Fla. 4th DCA 2010).

    Reversed and remanded.

(4) Go here for more posts on sewer service.

Northern NJ Couple's Suit Says Loan Servicer Duped Them Into Making Temporary Loan Mod Payments w/ Bogus Assurances That Deal Would Be Made Permanent

In New Milford, New Jersey, The Bergen Record reports:

  • Luis and Maria Valenzuela of New Milford struggled to pay their mortgage after a cascade of setbacks — including illness, a car accident, their daughter's layoff, and a granddaughter's autism diagnosis. The family's mortgage company agreed to a temporary loan modification, which lowered their monthly payments (including property taxes) from $3,250 to $2,156. But the Valenzuelas say that although they paid faithfully, their mortgage company refused to make the modification permanent.


  • The Valenzuelas have filed suit in Superior Court in Bergen County, accusing their mortgage servicer, Wells Fargo, of violating a contract — as well as consumer protection laws(1) — by refusing to grant them a permanent loan modification.(2)


  • Mario Blanch, the Valenzuelas' lawyer, acknowledges that there was no written agreement to make the temporary loan modification permanent. But he said Wells Fargo employees told the family they were on track for a permanent lowering of their monthly charges.

  • Moreover, he said, by accepting the family's modified mortgage payment for 11 months, the lender led the family to believe the deal would become permanent. As a result, he said, the family did not pursue other possible solutions, such as declaring bankruptcy. "They were given a promise, and that promise was breached," Blanch said.(3)

For more, see Family says lender did not deliver the mortgage relief it promised.

(1) A ruling by a New Jersey appellate court earlier this year held that unfair or deceptive practices by a lender or loan servicer in connection with the negotiation of an agreement to cure a default in a mortgage following the entry of the judgment of foreclosure is subject to the provisions of the New Jersey Consumer Fraud Act. Gonzalez v. Wilshire Credit Corp., 411 N.J. Super. 582, 988 A.2d 567; 2010 N.J. Super. LEXIS 16 (N.J. Sup. Ct. App. Div. 2010). See also Unfair, Deceptive Practices In Connection With Post-Foreclosure Judgment Loan Workout Negotiations Subject To NJ Consumer Fraud Act.

(2) For similar HAMP-related lawsuits brought against lenders & loan servicers for allegedly stringing borrowers along with empty loan modification promises, see:

(3) By giving the family assurances that the temporary loan modification would become permanent, causing them to abandon the pursuit of other possible solutions, the lender could open itself up to a defense of promissory estoppel which, if a court agrees, could make a lender's oral promises enforceable, even absent consideration given by the borrower in exchange for those assurances.

A California appeals court made the following observations with regard to the defense of promissory estoppel in a foreclosure action earlier this year in Garcia v. World Savings FSB, 183 Cal. App. 4th 1031 (2010) (bold text is my emphasis, not in the original text; all case law links may require free registration at

  • As a general rule, a gratuitous oral promise to postpone a foreclosure sale or to allow a borrower to delay monthly mortgage payments is unenforceable. (Raedeke, supra, 10 Cal.3d at p. 673; California Securities Co. v. Grosse (1935) 3 Cal.2d 732, 733; Secrest v. Security National Mortgage Loan Trust 2002-2 (2008) 167 Cal.App.4th 544, 547; Sutherland v. Barclays American/Mortgage Corp. (1997) 53 Cal.App.4th 299, 312; Karlsen v. American Sav. & Loan Assn. (1971) 15 Cal.App.3d 112, 121; Stafford v. Clinard (1948) 87 Cal.App.2d 480, 481.) fn. 9


  • The absence of consideration or benefit to the promisor does not, however, defeat a claim based on promissory estoppel. fn. 10 The doctrine of promissory estoppel "make[s] a promise binding under certain circumstances, without consideration in the usual sense of something bargained for and given in exchange." (Youngman v. Nevada Irrigation Dist. (1969) 70 Cal.2d 240, 249; accord, Raedeke, supra, 10 Cal.3d at p. 672.)

  • "Under this doctrine a promisor is bound when he should reasonably expect a substantial change of position, either by act or forbearance, in reliance on his promise, if injustice can be avoided only by its enforcement." (Youngman v. Nevada Irrigation Dist., supra, 70 Cal.2d at p. 249.)

  • "'The vital principle is that he who by his language or conduct leads another to do what he would not otherwise have done shall not subject such person to loss or injury by disappointing the expectations upon which he acted.'" (Wilson v. Bailey (1937) 8 Cal.2d 416, 423, quoting Carpy v. Dowdell (1897) 115 Cal. 677, 687.)

  • "'In such a case, although no consideration or benefit accrues to the person making the promise, he is the author or promoter of the very condition of affairs which stands in his way; and when this plainly appears, it is most equitable that the court should say that they shall so stand. [Citations.]'" (Wade v. Markwell & Co. (1953) 118 Cal.App.2d 410, 420.)

See also, Wrongful foreclosure – verbal assurance that foreclosure sale will be postponed may be enforceable (requires paid subscription; if no subscription TRY HERE, or TRY HERE, then click link for the story).